The High Price Of Populism

In this age of economic deprivation for so many, it is understandable that people seek relief wherever they can find it. Some do without, some shop at discount stores, some take second jobs. Unfortunately, some embrace whomever seems to be offering a helping hand. 

Here in Ontario, that 'helping' hand comes from populist politicians, most notably our own Will Loman ("Be well-liked and you will never want"), Doug Ford. Like the salesman he was through his Deco Labels business, which he still owns, Ford has never lost his appetite for public approval. And that propensity is leading all of us down a very dark economic road.

The province's latest budget, unveiled the other day, projects a tripling of the deficit to $9.8 billion, piling on top of the current debt of almost $400 billion. The government argues that it necessary to keep spending in these economically challenging times and making life more affordable for people.

And therein lies the rub. While the deficit and debt continue to grow, our populist premier is surrendering huge sources of revenue via an extension of the gas tax reduction, the ongoing elimination of auto plate renewal charges, massive subsidies to keep the price of hydro lower, and having the public pick up the tab for developers' charges, at the same time giving below-inflation increases to vital services like health care, education, etc.

Not everyone is fooled by this fiscal sleight-of-hand. Certainly, Toronto Star readers are not. Here are two of their letters

Perhaps if the Doug Ford government hadn't been so enthusiastic about shredding long-term stable revenue streams it wouldn't be in the deficit position it now finds itself. Since 2018 the province has lost approximately $1 billion a year each from the cancellation of the greenhouse gas cap and trade program, the elimination of vehicle licensing fees and reductions in the provincial gasoline tax. To this has to be added the billions in provincial revenues that are now having to be diverted to municipalities to pay for infrastructure needed to support housing, making up for the development charge revenues that were lost through Bill 23 — the infamous Building More Homes Faster Act. Then there is the ongoing $7 billion annual diversion of revenues to artificially lower hydro rates and hide the actual costs of nuclear refurbishments. In the longer term the costs of financing the government's "get it done" megaprojects, many of which, like the Highway 413, the Bradford Bypass and Pickering B nuclear refurbishment, have been previously assessed as uneconomic, unnecessary and destructive, has to be considered as well, in a context of increased interest rates. Beyond the long-term environmental and climate consequences of these choices, different decisions would have left the province far better positioned to make needed investments in areas like education and health care.

Mark S. Winfield, Toronto

Gas tax cut diminished government revenues 

The Ford government could handily have trimmed its deficit in this latest budget by cancelling its gas tax cut. By the government’s own admission, this tax cut has diminished government revenues by $2.1 billion over the past two and a half years. Might not all that money have been more helpful providing affordable housing, supporting public transit, and fixing our overburdened health-care system?

Kenneth Oppel, Toronto

For people like Doug Ford, life and politics are but a shell game, one that fools far too many people far too often. But in the end, we all wind up paying a very steep price.

The High Cost Of Serving Developers

Doug Ford has a lot to be happy about these days. His debt to developers is being rapidly repaid via his Bill 23, which will not only remove key parts of the Greenbelt for development but also relieve many of his friends' financial burdens paying development charges. 

The only problem is the largesse bestowed on them by Premier Doug means high costs for the rest of us, as Kofi Hope writes:

Currently, municipalities put a charge on most new developments (with some exceptions) to help fund the cost of infrastructure needed to serve those developments, such as roads, sewers and transit. The charges apply to each new unit built, and in Toronto an increase passed in 2022 raises them up to $137,000 for a new detached home.

The development industry has argued that these charges are a barrier to building new homes and to making housing more affordable. And some advocates have called for reducing these charges on specific types of housing that help with affordability.

Professor Matti Semiatyki of the Infrastructure Institute says that reducing or eliminating the charges developers pay will have real consequences.

 “Cities are expensive,” Siematyiki says. “All the things the city is raising money for with development charges are things they have to pay for… if developers or new owners don’t pay, someone else will pay, whether through property taxes or other ways.”

And this is the part of Bill 23 that has Ontario municipalities up in arms. It’s estimated that our already cash-strapped cities will lose $5 billion in revenue, and Mayor John Tory says the city could lose $230 million annually. 

The ramifications of waived developments fees are extensive.

 If municipalities lose the revenue of development charges, they’ll raise property taxes or user fees for things like garbage collection. These carrying costs all make it less affordable to own a home, and it doesn’t just affect homeowners. If owners of rental properties find their monthly costs going up, they will raise the rent for tenants. So even if the cost to buy a property in a city is, say, 15 per cent less, if you are paying thousands more each year to keep that property, has housing really become more affordable?

As well,

If municipalities believe they can’t recover the costs that are required for new developments, that could push them to resist new development proposals, meaning Bill 23 may add more conflict and delays to a process everyone agrees needs to move quicker.

And we have to remember, as they say, there is ultimately only one taxpayer.

 Whether government is providing grants to developers to build the type of housing we need, or waiving fees to incentivize housing builds, it means new costs (and costs for the state not private developers).

So in the end, no matter how one parses this, serving the interests of developers is working against the interests of municipalities and ultimately, of course, the taxpayer. 

The last time I checked, developers hardly needed state welfare. 

 

UPDATED: The Smell Of Urban Doom

It is expected that the Ontario government will today pass Bill 23, a.k.a. The Doug Ford Gift To Developers Act. The consequences of that legislation will be far-reaching, so much so that it warrants a united opposition from all who live in cities and enjoy the amenities that urban living offers.

Mississauga City Councillor Carolyn Parrish stops short of calling it panic. But in her 38-year political career, she says she has never seen the kind of stunned apprehension that Ontario’s More Homes Built Faster Act has evoked among municipal officials.

Known as Bill 23, the sweeping act aimed at building 1.5 million more homes in the next decade will freeze and reduce the development fees cities charge developers for the infrastructure to support the residents their buildings will house.

Across the GTA and beyond, politicians and bureaucrats are reeling at the prospect of what the Association of Municipalities of Ontario (AMO) estimates will be a $5.1 billion revenue shortfall over nine years, including $400 million in lost funding for community housing.

Civic officials across the region are using words like “unfathomable” and “devastating” to describe the fallout — tax hikes, service cuts and axed capital projects such as roads, sewers and transit.

The largesse that the Ford cabal is serving up to its developer overlords will come at a heavy cost to municipal taxpayers.

Mississauga says the new development rules will mean an $885 million loss in revenue over the next decade. Filling the gap would require a five per cent property tax increase every year for at least 10 years and/or cuts to city services and capital projects, according to city staff.

The government's propaganda would have the simple believe that the bill will result in more houses built in a cheaper and more timely manner. As well, Housing Minister Steve Clark says it will provide incentive for developers 

to build more affordable and purpose-built rentals thanks to new fee exemptions on those projects. It will also help reduce the cost of housing for those looking to buy.

Critics say 

there is nothing in Bill 23 that compels developers to build the kind of affordable rentals and supportive housing that protects against homelessness.

“If municipalities lose this funding they’re put in an impossible position. They will not have enough money to pay for the infrastructure that we need to continue for current and new Ontarians,” said Toronto NDP MPP Jessica Bell, a member of the legislative committee charged with gathering public feedback on the bill.

She said she was struck by the sheer enormity of the housing bill, which is hitting at the same time as the Premier Doug Ford’s Progressive Conservative government has allotted strong mayor powers to Toronto and turned over 7,400 acres of the protected Greenbelt to housing development.

Richmond Hill Mayor David West said his city has also asked the province to pause Bill 23 to allow for consultation.

“The costs to municipalities when growth does not pay for growth will be unfathomable,” said West.

“You either have to do without growth infrastructure, or the infrastructure can’t be paid for any other way but through property taxes,” he said. “That tax base was never designed to pay for this kind of growth.”

Clearly, there is method in the Ford madness. As has been observed, Bill 23 comes at a time when many new city councils have yet to be sworn in, and even those that have been have had no time to digest the full implications of this retrograde bill.

I recall not too long ago that Doug Ford was booed publicly. I suspect that experience will ultimately be dwarfed by the massive outrage that will ensue once the effects of this destructive bill are felt: closed libraries, decaying infrastructure, massive tax hikes: these are not the rantings of prophets of doom. Rather, they are the inevitable outcomes of having elected a government whose primary allegiances are hardly with the people they, in theory, serve.

 

 UPDATE: Bill 23, the More Obscene Profits for Developers Act, has passed.

 

 

The Smell Of Protest

Tomorrow marks the day that the Ford Government enacts Bill 23, The Gift To Developers Act. It can also rightfully be designated The Environmental Destruction Act, since it will not only fill the already overloaded bank accounts of Ford's wealthy friends, but also deplete the natural reserves we have to battle the ever-increasing pace of climate change. 

Of course, Conservatives have never been known for their long-range planning capacity.

Nor has this government for the people ever been known for listening to the people. Nonetheless, protests continue, one hopes a cogent reminder that some people have long memories. Here is a clip from one of the protests conducted yesterday:

I suspect the Ford cabal is sadly mistaken that people will return to their usual quiescence once the bill is passed. Too much is at stake environmentally; add to that cost the much higher taxes ratepayers will have to pay since the bill also greatly reduces the fees developers must pay for the infrastructure needed in their sprawling developments. Indeed, the Association of Municipalities of Ontario estimates the bill could leave communities short $5 billion and see taxpayers footing the bill, either in the form of higher property taxes or service cuts.

Like the bully he is, Doug Ford thinks he can imperiously sweep aside opposition by legislative fiat. Yet he is grossly underestimating the popular opposition Bill 23 has provoked. He is also underestimating the power municipalities have in either stopping or greatly slowing down his sprawling vision. As I recently wrote about what some on the newly elected Hamilton city council are contemplating:

Simply deny the budgeting funds needed to pay for the costly infrastructure that new, far-flung development entails. It is difficult to see how the Ford cabal could counteract such a measure, unless the premier invoked another notwithstanding clause threat to overturn local democracy.

May the passions and forces coalescing against Ford's heavy-handed rule ultimately prevail.